WASHINGTON: With all the excitement of starting your recreational marijuana business and the mounds of paperwork to complete, for I-502 licensees readying for market, little details about mundane topics like insurance may get overlooked. The bad thing about overlooking any of the required details, is that you risk your application falling to the bottom of your investigators list. To eliminate this from happening, let’s dive into the LCB requirements for insurance.
According to WAC 314-55-082, the intent of the insurance you’re required to buy is to protect the consumer of your product. For this reason, the LCB requires two coverages and they both have to be at $1,000,000 or higher. First, Commercial General Liability (CGL) is required to protect someone from your negligence on the premises. For example, if someone comes to your property and slips and falls due to water on the floor, then you may be responsible for their injuries. But, that’s not all.
Second, due to the specific language in the Code, which says, “…insurance shall also cover bodily injury, including disease, illness and death…” you’re also required to purchase Product Liability. Although the term Product Liability is never mentioned in the Code like General Liability is, the only way to get coverage for disease, illness and death from the product you sell is Product Liability. Therefore, in order for you to obtain and keep your license, the LCB must see General Liability and Product Liability listed on the Certificate of Insurance listing the WA State LCB as an Additional Insured.
Keep in mind, just because these are the only two required coverages, that doesn’t mean they’re the only coverages you can get. As you’ve seen, every organization is out to make a buck in this industry and the insurance companies are no different. For whatever price they set, the insurance companies are willing to provide coverage for indoor and outdoor equipment/tools, building, Loss of Income, Crop Coverage, and, more recently, Commercial Auto Insurance for delivery.
If you have more questions, feel free to contact Paul Pukis at Mosaic Insurance Alliance LLC where he runs the WA State Recreational Marijuana Insurance Program. Through this program, Paul has access to five insurance companies willing to compete for your business. You can reach Paul at 425.320.4280 or Paul@Mosaicia.com.